Sales and Sales Management Blog

February 5, 2015

Objection? Buying Signal? Maybe Neither–Maybe You’re Being Put Under the Microscope

A few years ago I wrote an article titled “How to Take the Sting Out of the Price Question Early in the Sale.”  In the course of the article I argued that it is natural for a prospect to ask about price–and often to do so too early in the sale, before the seller has had an opportunity to create real value for the prospect—because price is one of the factors prospects use as they seek to qualify the seller and the purchasing opportunity.

In response to that article I received numerous emails and comments from salespeople and sales leaders that they had never thought about the idea that the prospect is qualifying them and their offering at the same time they are trying to qualify the prospect.

Yet the prospect’s qualifying the seller and the seller’s value/solution is the crux of the whole sales process.

We are all familiar with the concepts of qualifying the prospect, investigating needs, developing a solution and creating real value for the prospect, overcoming objections, and the other aspects of making a sale.  All of these concepts are views of the sales process from the seller’s perspective.  These are the constructs that we as sellers tend to concentrate on.

We then view the prospect’s questions as either worrisome objections that are nothing but a smokescreen or are out-n-out buying signals.  For many of us, the questions and actions of the prospect are either those of an enemy or those of someone telling us they are ready to buy.

What if neither of those choices is true?

What if all of those questions and the statements by the prospect, instead of being obstacles to our sale or indications of their desire to consummate the purchase, are simply questions and statements to help them qualify us and our offering? 

What if they are doing the same to us as we are doing to them?

If that is the case, then that means we’re neither dealing with an enemy to be overcome nor are we dealing with someone asking us to close them.  Instead we’re dealing with a human being who wants to know whether or not we’re trustworthy, whether or not our offering is appropriate for them, whether or not we’re wasting their time.

In other words, they are in the process of qualifying us just as much as we’re qualifying them.  When we qualify a prospect we ask questions and probe to discover who we’re dealing with and what we might be able to do for them.  When we’re asking questions we’re not trying to play the ‘gotcha’ game.  Most of us aren’t trying to trap them into a sale.  We’re honestly seeking information that allows us to know whether or not we are in front of a real prospect with a real need that we can help solve in a way that produces real value for them.

The prospect is going through the same process with us.  Whether they are conscious of it or not, they’re trying to determine whether or not we are someone they want to do business with, and then, whether or not our product/service/company presents any real solid worthwhile value for them.

The traditional terms sellers think in—overcoming objections, closing the sale, etc.—tend to set up an adversarial relationship where we are on the lookout for the dreaded objection and the opportunity to pounce with the closing question.

However, if we recognize that the sales process involves both parties qualifying one another and that the qualifying process involves the investigation and questioning of each party, we can relax and begin to address the prospect’s questions for what they really are—a legitimate desire to find out who we are and whether or not we are someone they want to work with.

Go forth and qualify—and let yourself be qualified.  It’s a whole lot more fun to sell when you’re working with a prospect to mutually qualify one another than it is to try to out fox and overcome an adversary.

 

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January 15, 2015

Guest Article: “The Most Underutililized Strategic Advantage,” by Lee Salz

Filed under: Closing Sales,sales,selling,small business,success — Paul McCord @ 2:15 pm
The Most Underutilized Strategic Advantage
By Lee B. Salz

You have been chasing this account for six months and feeling optimistic as the buying process is coming to a conclusion. The sale is between you and two other firms. The competition is fierce, but you feel you are ahead. At 11am, the Procurement Agent asks for three references to be provided to her by the end of the day. In a panic, you send a company-wide email in search of these referenceable clients. At 4:58pm, you get the three references from your colleagues and quickly send them out to the Procurement Agent. Whew! Mission accomplished! They wanted three references and you got it done. And so did everyone else. You see the finish line, forgetting that many a sales person has fallen one step short of winning.

This scenario plays out in companies every day across the country. It doesn’t matter if the company is big or small, nor does it matter the type of industry. The request for references is a standard part of any buying process. However, few sales people use the reference stage of the process to their strategic advantage. They simply desire to provide a quick response to the prospect with their requested references. In the mind of the sales person, the speed of the response communicates supplier performance. While somewhat true, the discussions the prospect will have with the references carries more weight in the selection decision than the speed of the response from the potential supplier.

When I talk to sales people, one of their most common gripes is that they are selling a product that is viewed as a commodity in the marketplace. They cite “price” as their biggest bugaboo. Right behind that they lament about their inability to differentiate their product. (The truth is that price and differentiation are directly related, but that is a topic for another article.) When I ask sales people if they would like to learn of an easy way to get a competitive edge, they are all ears. After I share with them that they have the ability to differentiate themselves through managing the reference selection process, they look at me in shock as they can’t believe they have been missing this opportunity. Then the stories start to come out. “Yeah, I lost a deal because they called the reference and we had just screwed up their order. I should have checked before I used them” The stories just continue from there.

But why do prospects ask for references? Webster’s defines “reference” as someone who can make a statement about a person’s qualifications, character, and dependability. Interestingly, there is a perception disconnect on references between sales people and prospects. When I talk to sales people, I usually hear that references are just a standard part of due diligence. Some use the term “rubber stamp” of an award. However, when I talk to buyers, I hear a very different message. Many buyers look at the reference step of the buying process as their opportunity to validate the message that they have been hearing from the potential supplier. In essence, prospects are searching to ascertain whether a supplier can deliver on the promises made during the buying process. Can the supplier really handle this size account? Are they really that fast? Or that accurate? Is the service as good as they described?

In many cases, the change of provider carries with it the ownership of the supplier’s performance. If the new supplier does not perform to the expectations that have been represented, there is risk for those who selected it. Heads will roll! Sometimes, prospects ask the same questions of the reference that they asked of the sales person to see if there is a difference in response. Other times, they ask specific questions relative to their needs that may not have been shared with the sales person. For the prospect, this is their most critical evaluation step of a supplier’s expected performance.

It is the little things that winning sales people do that makes them winners. So, if all of the competing sales people are going to provide “good” references, can you provide the “best” references? You most certainly can! However, there is a process to do so as “best” is different for each prospect.”

The first step is a conversation with the Procurement Agent. “I received your request for references and I’m happy to provide them. So that I can provide you with the references that best support your initiative, what are you hoping to learn from our clients?” If you can gather that information from the Procurement Agent (don’t say it can’t be done until you try it), you have the roadmap to identifying references. Even if they can’t or won’t provide you with this information, you have at least shown that you care. And “care” can be the differentiator that pushes you across the finish line. All is not lost if you can’t get that information either.

Going forward by taking a step back, think about the account and what is important to them. Reflect on what was learned during the needs analysis discussions. Thinking about that, imagine a different approach to responding to the request for references. If they were concerned about implementation, you provide an account that your company recently implemented. Perhaps, the decision is being made by a CFO, and you provide a reference of a CFO from one of your clients that can speak to your performance. For the third reference, you provide a client that is purchasing the same amount of the same product. From the prospect’s perspective, how great is the opportunity to speak to three clients who can relate to their needs. They are able to gather the information they desire from someone with whom they share something in common. They feel confident in their ability to perform due diligence on their potential supplier. They can make an informed decision.

To take it a step further, imagine rather than simply sending the contact names and phone numbers to that Procurement Agent, you provide a brief narrative explaining to what each client was serving as a reference. How many sales people are doing that?

Still raising the bar, imagine contacting each of the three references and informing them that a call was coming their way to discuss your performance as a supplier. During that call, you share that this prospect is calling to discuss particular areas of the business. Thus, when the prospect calls the reference, the reference is expecting the call and is prepared for the conversation. What a great experience for your prospect and your client. Keep in mind, one great way to burn a relationship with a happy client is to surprise them with a reference phone call. No one likes to be blind-sided or unprepared. I’ve seen more than a few opportunities lost where the prospect cited the reference experience as the deciding factor. An unprepared reference reflects negatively on the supplier.

In a competitive marketplace, every opportunity that you have to demonstrate value to a prospect is critical. Leveraging the reference step of the process can give you just that little edge that pushes you over the top.

 

Lee B. Salz is a leading sales management strategist specializing in helping companies build scalable, high-performance sales organizations through hiring the right salespeople, effectively onboarding them, and aligning their sales activities with business objectives through process, metrics and compensation. He is the Founder and CEO of Sales Architects, Business Expert Webinars and The Revenue Accelerator. Lee can be reached at lsalz@SalesArchitects.net

August 9, 2012

Nobody Likes to be Sold? Au, Contraire

One of the sales truisms today is that no one likes to be sold but people love to buy.  This phrase is tossed around with such casualness and is so oft repeated that it has become accepted without question.

And why wouldn’t it be accepted since its pithy, it sounds so common sense and a ton of salespeople don’t like it when another salesperson tries to sell them and they naturally feel that everyone else will have the same reaction?

The problem is it isn’t common sense—and it isn’t true.

I know lots of people who love to be sold.  My wife likes to be sold.  A couple of my good friends like to be sold.  I have clients who like to be sold.

If nobody likes to be sold how come I know quite a few people who like to be sold?

The answer is quite simple—people aren’t all the same.  We don’t live in a world where everyone has the same likes, the same wants, the same needs, the same anything including the same way to shop.

Some people want to buy, others want to be sold.

What a wonderful world where there’s variety in opinions and wants and needs—and desires when it comes to buying or being sold.

But the very fact that people are different is what makes selling so difficult.

If we want to be successful in sales we have to know our prospect—and that means knowing how they shop—by buying or being sold.

If you buy into the myth that no one wants to be sold and thus treat everyone as “buyers” you run the risk of missing the sale to those who want to be sold.

Likewise, if you treat everyone as a prospect who needs to be sold, you’ll blow your opportunity with those who want to buy.

Making assumptions about the prospect is the real issue.  Allowing yourself time to get to know and understand your prospect will tell you who the prospect is and what they want from the relationship.  They’ll let you know if they want to buy or to be sold.

Once they let you know it’s your job to meet them where they are and deal with them on their terms, not where you wish they were.

July 25, 2012

Guest Article: “Help! I Can’t Close Sales: 5 Ideas to Increase Your Close Ratio,” by Jill Konrath

Filed under: Closing Sales,sales,selling — Paul McCord @ 3:08 pm
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Help! I Can’t Close Sales: 5 Ideas to Increase Your Close Ratio
by Jill Konrath

Recently I got an email from Ahmed that said, “Do you have anything on how to close sales? Getting into an account isn’t a problem for me. But I get stuck after submitting a proposal.

“By this time, I’ve already sent them all our marketing materials and given them a demo. They seem interested. Then, after they get my proposal, nothing. What am I missing?”

I can’t tell you how many times salespeople have asked me to help them get better at closing. However, despite what you think, it’s not the real problem. 

Your inability to close is a symptom. What it really means is that your prospect does not think it’s worth making a change right now. In short, it’s nice to know about your offering, but not necessary.

Five things you can do to get better at closing sales.

1. Know your impact. Make sure you’re clearly able to articulate the business value of your offering. You should ensure that you’re talking about key business drivers such as reduced operating costs, increase sales conversation rates or improved efficient. Adding metrics makes your message even more impactful.

2. Be a storyteller. Share examples of how you’ve helped other customer improve. Be able to explain how they were doing things before, the challenges they faced, and the results they’ve achieved since working with you. 

3. Slow down. Based on what you said, you may be moving things along much too fast. You’re showing your stuff, sending collateral and giving pricing. It’s highly likely that they don’t feel like you’re focused on their success. Take time to build the relationship so that they truly feel that you’re a credible resource, not a self-serving sales guy.

4. Connect the dots. It’s imperative to engage your prospect in a discussion. This helps you/them determine if your offering makes sense for them. Here are some good ones to start with:

  • How are you currently handling your needs in this area?
  • What are your objectives relevant to the business drivers this product/service addresses?
  • What initiatives do you already have in place to get there? 
  • If you achieved results similar to our other customers, what would this mean for your organization?

See where I’m going with this? If your prospects aren’t making the connections between what you sell and the value they could get from it, it’s because you’re leaving it to happenstance. 

Don’t let that happen. Plan your questions ahead of time. They are your greatest tools in getting to a yes. 

5. Stop trying to close. Instead, focus on helping your prospect determine if it makes good business sense to change. If it does, they’ll say yes. If not, they’ll stay with what they’ve got. 

Today’s prospects are too savvy to fall prey to any closing techniques. The more you try to do it, the less they want to do business with you. Instead, put your emphasis on the front end of the sales cycle.

Before you know it, your prospects will be saying, “How soon can we get going on this?”

Jill Konrath is the author of two bestselling sales books and is a popular speaker who helps sellers crack into new accounts, speed up sales cycles and win more business.  You can learn more about her at her blog or her website.

July 19, 2012

Guest Article: Outselling a Price Slasher, by Dave Stein

Filed under: Closing Sales,sales,selling — Paul McCord @ 9:38 am
Tags: ,

Outselling a Price Slasher
by Dave Stein

I’ve been getting emails recently from salesreps and managers asking me to provide advice on how to overcome competitors who slash prices to win. Although I’m certainly capable of providing guidance, it occurred to me that I had a section in my 2004 book How Winners Sell addressing that.  So, after a bit of editing, here is the adaptation:

How do you compete against a competitor that drastically discounts at the last minute to win business?

Early in evaluation cycles prospects may say that price is a consideration, but not first on their list. Later on, once they have ignored or devalued any unique capabilities that your product or service can provide—to the point where they “can see no measurable difference between your offering and your competitor’s” — price gets elevated to the number one consideration. We’ve all seen it happen. By that point it’s generally too late to remedy the situation. You’re trapped. So recognizing potential situations early on where a buyer will buy on price is critical.

Here are some recommendations that will point you in the right direction. Of course each of these recommendations should be integrated into your team’s selling methodology.

Qualify. In any competitive sales situation you have to monitor the prospect’s decision criteria like a pilot checks her instruments—vigilantly. During the course of an evaluation decision criteria often change. In fact, aren’t we often the ones who attempt to effect that change to gain competitive advantage?

Among the most critical of all decision criteria these days is price. What are the key evaluators’, buyers’, recommenders’ and decision makers’ requirements and expectations with regard to price, today? If you are just getting engaged with a prospect and their number one decision criteria is price, you (or your manager) will have to decide whether it’s even worth competing. Clearly, knowledge of your competitor’s historic actual selling price will be critical in this decision. So will an understanding of your prospect’s recent buying patterns with regard to price.

Buyers focused on price de-emphasize or entirely ignore factors such as:

  • Supplier product or service quality
  • Supplier viability
  • Supplier post-sales support capabilities
  • Post sales costs (contributing to total cost of ownership)
  • The knowledge and experience a supplier can bring forth
  • Areas of additional value that you may be able to provide above and beyond what they have specified
  • Quality, knowledge, and experience of supplier personnel
  • References

Address the issue head on and early. “Is your company going to make a decision based entirely or substantially on price?”  And please, make sure you are asking these questions of, and selling to, decision makers. All this matters very little to the people at lower levels in organizations.

Educate yourself. Here are just some of the questions for which you need answers to outsell a competitor that dramatically discounts to win business. (Ideally we’d like your Sales Enablement team to provide you with these answers as well as what’s needed to overcome the challenge.)

  • Is their discounting tactical or, in the case of some very successful companies, strategic—a key component of a go to market strategy supported by their business plan? (It’s hard to compete against Walmart on price…)
  • When do they offer these drastic discounts and under what conditions?
  • How do they dilute the unique value of what you are selling in the prospect’s eyes?
  • How well do they deliver post sales service?
  • How often do they produce new products or upgrade their services?
  • What is the satisfaction level of their customer base?
  • What is their financial position? If they are publicly held, look at their P&L, Balance Sheet and Cash Flow Statement for the most recent quarter and going back in time. (If they are privately held, get your CFO or a finance resource to create a pro forma set of financial statements that might represent what that competitor’s financial position might look like. It could provide you with insights into where that competitor’s vulnerabilities lie.)
  • What do you know about their human resources? Look into staff and executive attrition rates, quantity and quality of SMEs (subject matter experts), levels of staffing, and customer care hours—anything that will point toward discount-caused reduced margins impacting operating effectiveness.
  • Look at their corporate culture. What do they value? Integrity? Quality? Are they doing the right things for building a long, profitable future or are they highly opportunistic, with little regard to what will happen tomorrow?
  • Uncover what the competition uses to deflect their prospects from exploring the areas listed above. In technology, you’ll often find that the lowball competitor has the sexiest demo, for example.

Discover and Quantify Your Value. Whether or not you suspect that a low-price competitor will be included in the bidding process, you (or other resources within your organization) will need to quantify the value of your offering—in terms of financial return. When you are competing against someone who drastically discounts, it’s especially important to get close to the prospect and really understand their requirements. Not only will that enable you to better position your solution, but, more importantly, you’ll be able to uncover areas of potential additional value for the customer that can be derived from the differentiators that you are selling. If these differentiators are linked to financial impact for the prospect, they are not likely to become expendable nice-to-haves, eliminated from consideration in what might turn out to be a commodity buy. Even if the prospect doesn’t want to or can’t invest in that added value now, you’ve expanded their vision past what your competitor has done and have set yourself up for add-on business later.

Educate and Position. Winners who are really good at competitive selling subtly but definitively alter their prospect’s perception that buying at the lowest price is the prudent thing to do. You can really only do this effectively when you are selling at the appropriate executive levels.

  • Talk to the buyer about the challenging business conditions that face all of us, and the natural tendency to buy at the lowest price.
  • Talk about companies in the prospect’s as well as your own industry who have gone out of business as a result of tactical discounting, and the impact that had on those companies’ customers. (You need to do some homework here.)
  • Implore the prospect to ask questions of the other contenders that will expose weaknesses that result from tactical discounting. (See “Educate Yourself,” above.)
  • Educate the prospect on the differences between price, cost, and business value and the impact on of those factors on their business. Understand the prospect’s own business model, their culture and how they sell to their customers so you can link your approach to theirs. (If they sell a commodity themselves, at the lowest price, you may have a serious challenge.)
  • Immunize the prospect in advance against what will likely be a lowball bid by your competitor. Explain how, when, and why it will happen. Prepare the prospect for what you know will come. Don’t just sit back and wait.
  • Convincingly reduce what will likely be price differentials into meaningful, real terms. “Since there is typically a five-year life cycle associated with my product, and it will, admittedly require potentially a $240k additional investment, I figure that comes to $4k per month, which, you have to agree is less than a rounding error (or full-time employee) in terms of the business value we’ve been talking about.”

Get creative. If you haven’t tried risk-sharing, phased deliveries, guarantees, extended warranties, or other creative approaches that will enable you to win the business without discounting, you need to do some brainstorming with your team. Very often a cash-strapped competitor who has been discounting to win business falls flat on their face when asked to match such creative selling.

Few of us can afford to sit back and wait for the competition to slash their price and walk away with the business. Understand your customer, your competitor, and your unique value.


Adapted from How Winners Sell: 21 Proven Strategies to Outsell Your Competition and Win the Big Sale   (c) 2004 — Dave Stein.  All Rights Reserved.

Note: I need to make it clear that it is not the responsibility of the individual salesrep to figure all this out. Nor is it her job to build the approach, tools, messages, and everything else required to compete against price slashers and consistently win. That’s what a strategic approach to sales effectiveness provides.

Dave Stein is CEO of ES Research Group, a company that evaluates sales training companies as well as providing in-depth industry research and reports on sales training trends.  You can find Dave at his blog: http://davesteinsblog.esresearch.com/about/

February 23, 2011

Guest Article: “Your Customer’s PIR: Price Investment Ratio,” by Mark Hunter

Your Customer’s PIR: Price Investment Ratio
by Mark Hunter “The Sales Hunter”*

Have you ever really considered how price affects your customer with regard to their *perceived benefit*?  Too often, we use a simplistic approach to determining a price – figure the cost to produce a product or service, tack on some arbitrary percentage, and call it good, right?

Price, though, is consequential in ways we may not initially consider.  The price a person pays for something goes a long way in determining the perceived benefit they expect to get from it.  The perceived benefit cuts two ways. First, the expectation of service goes up the more a person pays for something. Second, the perception of what they’re gaining also goes up with the amount they pay.   The two are not opposites; they work in tandem, and in nearly all businesses, this tandem relationship can and does work to your advantage.

Many companies, hopefully including yours, are known for delivering incredible service.  This quality service may be what your customers comment upon and why they are willing to refer you to other customers.  This level of service comes at a price. One of the things you always should be doing is explaining to and showing your customers how your level of service helps them.

The more you share this type of information with your customers, the more comfortable you become in seeing the value of what you offer.  Having confidence in your service allows you to increase your “Price Investment Ratio” (PIR). This all has to do with what you expect customers to pay.

For the customer, the PIR is revealed when you help frame their expectations.  To help explain this best, let me refer to what I call the “IBM paradox.” This is the belief people have that although you will pay more for anything you buy from IBM, you will never be fired for using IBM.  What this means is there are plenty of companies that sell the exact same items and services as IBM, but at a less expensive price.  Although other vendors will be less money, there is a level of safety and confidence in using IBM – so much so that it translates to a premium price that customers will pay.

The “Price Investment Ratio” (PIR) is the amount over the minimum amount a person would have to pay for something. They are willing to pay it to feel confident in what they are buying.   You might say the PIR should really be the CP – the “Confidence Premium.”

There are no two ways about it – when you have great service but do not reflect it in your PIR, then you are underselling.   If you are underselling, you are not making the profits you could be making.

I can hear some of you at this point thinking, “What if we don’t have a solid sense of how good our customer service really is?”   In other words, maybe your company receives very few complaints, but at the same time, you are not sure if your service is at a higher caliber than what your competitors bring to the table.

In order to find out your “Price Investment Ratio” (PIR), you must do a deep dive with your existing customers to get them to tell you what your service means to them.  Once you do this, you can then match up what existing customers are telling you with what prospective customers are asking you to do.   When you grasp this, you begin to understand what the PIR really should be.  How much “investment” is the customer willing to make in going with you instead of your competitor?

As I have often said, in the B2B arena, companies don’t buy anything, they only invest.   If your customer can’t see the return on investment, they won’t *invest* – they won’t pay the price you want to get.   When they *do*see the value, though, then you can feel very confident in charging a price above what your competitors charge.  Don’t settle for a lower price when doing so is detrimental to your bottom line.

Mark Hunter, “The Sales Hunter,” is a sales expert who speaks to thousands each year on how to increase their sales profitability.  For more information, to receive a free weekly email sales tip, or to read his Sales Motivation Blog, visit http://www.TheSalesHunter.com

 

October 29, 2010

Guest Article: “The Biggest Goof Sellers Make When Dealing with Hot Prospects,” by Jill Konrath

Filed under: Closing Sales,Handling Prospect,Qualifying Prospects — Paul McCord @ 8:19 am
Tags: , ,

The Biggest Goof Sellers Make When Dealing with Hot Prospects
By Jill Konrath

I dream of hot prospects who call me up and say, “We’ve heard good things about your company. We want to make a decision quickly. We’re hoping you can help us out.”

Occasionally my sales fantasies turn into realities. When it happens, it’s so easy to be seduced by this low-handing fruit. Outwardly, I try to appear calm, cool and collected – a true professional. But inside, every inch of my body wants to scream out, “Take me! Take me!”

Okay. I’m being a bit dramatic here, but I really want to make my point.

It’s so easy to be tempted by these opportunities. And when you yield to this temptation, you make fatal mistakes—ones that can totally derail your sales efforts and cause you to lose the business.

True, But Embarrassing Story

Let me give you a personal example, to show you how easy it is to get caught up in this seduction.

A few years ago, my primary business focus was working with large corporations in the Minneapolis/St. Paul area when they were launching new products. My expertise? Helping them shorten time to revenue on new product introductions.

I’d just launched SellingtoBigCompanies.com to help small businesses gain access to my expertise. It was my new baby. I’d invested tons of time and lots of love to get it up and running.

When the phone rang that day, I answered absentmindedly. But when the caller announced that he was from Southwest Airlines, I snapped to attention. He’d been all over my new Web site, was very impressed, and also very interested in my training programs.

The airline was going to be putting its salespeople through training in the not-too-distant future and was evaluating its options. When I asked who else he was looking at, I was delighted to be included with the industry biggies.

Mr. Southwest had dozens of questions about my content, delivery models, remote training options, learning reinforcement and more. I answered every single one of them in glorious detail.

When he requested a proposal, I asked, “How soon?” When he answered that he wanted it in two days, I quickly agreed.

The proposal I sent to him via e-mail covered everything we had talked about in our conversation, plus a full range of pricing options. It was a masterpiece. I had high hopes that this opportunity would take my business to a whole new level.

I never heard from Mr. Southwest again. Even though I contacted him many times, he never called back.

Lesson Learned

It was my own fault. I mistakenly let my own eagerness to land this marquis customer outweigh my common sense.

The truth is I really needed the business at that time. After spending many months and lots of money to create SellingtoBigCompanies.com, I was running short on cash. I should have known better, but I was seduced by the opportunity.

In retrospect, I failed to find out if Mr. Southwest was just exploring his options or actually in the final stages of decision making. It’s highly likely he was just doing the former.

Had I known that, I would never have written a detailed proposal. Instead, I would have focused on helping him determine the business value of making a change. I would have used my expertise to help him sell the concept internally and establish decision criteria favorable to my solution.

Over and over again, I see other sellers make similar mistakes when they have a hot prospect on the line. Like me, they expound on their capabilities and benefits. They willingly provide detailed information and do tons of extra work to create proposals or presentations—anything the prospects want.

While that puts you into the “nice” seller category, it’s not a good business decision to invest tons of time and effort to land a fantasy customer. Nor does it help your prospects make the best decision for their organization.

If Mr. Southwest was actually deciding in a couple days, I should have addressed the fact that I was a small boutique firm that didn’t compete head-on with the larger companies he was looking at.

Doing business with me would have been risky. I knew that. But I didn’t want to bring it up; I was hoping he wouldn’t notice!

I was so blinded by the opportunity that I was willing to do anything that he asked. It was delusional on my part. Wishful thinking. Hopeful. When we feel this seduction, we need to remind ourselves that “hope is not a strategy.”

While hot prospects may hold the promise of big paychecks, there’s often much that still needs to be determine if it’s a good fit for your company.

Don’t be overeager. Instead be ruthlessly realistic. Detach from the fantasy and assess your true chances. Bring up the tough questions. .

Why? Because it’s the right thing to do for both you and your prospect.

Jill Konrath, sales strategist and bestselling author of Selling to Big Companies and SNAP Selling, is a frequent speaker at annual sales meetings, kick-off events and professional conferences. Visit her website

May 12, 2010

Where Is Your Sense of Urgency?

My wife and I are In the middle of purchasing a new home.  Since we had to arrange for insurance coverage on the house, I thought this would be a good time to re-evaluate our auto policy.  About three weeks ago I called four local agents, including our current agent, for quotes and completed an on-line questionnaire to see if quotes from agents who compete for business generated by an internet site would be more competitive.

I completed the on-line questionnaire on a Thursday and almost as soon as I submitted it I received calls from two agents—one local, the other out of Austin.  I didn’t receive any other calls from the on-line form until Tuesday of the following week when I received one.  I was contacted by another insurance agent on Wednesday and then two more on Thursday—fully a week after submitting the questionnaire.  They were way too late as I had decided by Tuesday to stay with my current insurance company.

But the calls from agents haven’t stopped.

I received calls from nine agents the following week and by seven more agents the third week.

To date, I’ve received calls from 22 agents–which should have given me every opportunity to acquire the best policy/rate combination possible.  Except only two agents responded to my inquiry in a timely manner.   Twenty agents or marketing departments had no sense of urgency in following up with my inquiry and consequently had no chance of acquiring my business.

Only two out of twenty-two agents had a strong enough desire to make a sale that they found a way to contact me quickly.  That’s pathetic.

But that’s hardly the only case of lethargy I’ve encountered lately.

We’re getting the carpets cleaned in our current residence when we move.  As with insurance, I called multiple carpet cleaning companies to get quotes.  I called six companies on a Tuesday and immediately spoke to one and had my voice mail returned the same day by another.  Another company called me Wednesday.  I heard from the fourth on Friday and the fifth the following Tuesday. I have yet to hear from the sixth company.   I had made my mind up by Wednesday afternoon on which company to hire.  Fully 50% of the companies I called never had a chance to get the business because they did not respond quickly enough to be in the running.

Should I give a third or even fourth example?  I experienced the same issues hiring a home inspector and trying to arrange for a paint contractor.  In both cases over 50% of the companies I contacted either have not responded or responded after I had hired one of their competitors.

In all four cases I believe I’ve acted as most consumers would—I made the inquiry and made my decision within two to five days.  Those who reacted promptly competed for my business; those who either because of a lack of a sense of urgency or because their marketing department or sales manager didn’t get them the lead in a timely manner lost the opportunity to make a sale and squandered their marketing dollars.

A quality lead has a very short shelf-life—whether we’re talking about the retail situations above or a long sales cycle, sophisticated product or service.  Someone–you or your company–has paid good money to get the phone to ring, to get a lead card mailed back, or get a form filled out on the internet.  Every minute you wait to contact a prospect is a minute you’re giving the competition to close the deal before you even get there.

If leads come to you directly, discipline yourself to respond to them immediately.  If they come through your sales manager or marketing department and you know that they are slow to distribute them, light a fire under their butts. 

There is simply no excuse to lose sales because a lead wasn’t contacted in a timely manner; nevertheless, there are a large number of sellers and companies who have no sense of urgency, giving those who are quick to respond a significant—and likely decisive–advantage.

What about you?  Where is your sense of urgency?

April 26, 2010

Guest Article: “Four Things To Do When Clients Pressure You for Lower Fees,” by Mike Schultz

Four Things To Do When Clients Pressure You for Lower Fees
By Mike Schultz

“We are ‘firm’ on all fees and never discount.”
     ~ Respondent to the RainToday.com 2008 Fees and Pricing Benchmark Report

Ask a services firm leader at an industry conference, “Does your firm discount its fees?” and you’re likely to get a response that goes something like this, “We don’t discount.”

You’re then likely to hear that due to the demand for the firm’s services and the high level of its quality and service, the firm simply doesn’t need to discount.

One alternative answer might be, “Yes, we discount. If the client pressures us on price, you know, you gotta do what you gotta do to get the business.” While you might hear this, it’s unlikely you will. Nobody wants to position themselves as the firm that needs to drop fees to win clients. And if a firm does discount, they sure don’t want it public.

While firms might do it quietly, they do, indeed, discount. In the 2008 Fees and Pricing Benchmark Report, 1,811 respondents from five major professional service industries reported heavy discounting.

What percentage of firms reported that they discount their fees, you ask?

  • 76% of law firms
  • 66% of architecture and engineering firms
  • 65% of consulting firms
  • 61% of accounting and financial services consulting firms
  • 58% of marketing, advertising, and PR firms

As much as firm leaders would like to avoid it, and as much as the consultants to services firms rail against it, firms discount. And discounting is likely to continue.

The question then becomes, what do you do when clients push back on your fees?

The glib answer is: focus on your value. It’s trite, but true. If it’s worth it to the client they’ll pay for it. But when faced with price pushback, many are at a loss for what to do at that moment.

Here are four guidelines to follow the next time a client puts the price pressure on:

1  Don’t backtrack: I was playing golf with a bunch of old friends last summer. One of these gents is an attorney who was speaking about his services with another old friend who runs a hedge fund. Without being asked, he got to price and said, “My fees are $300 per hour, but if you need me to, I’ll work for less.”

Here’s an example of backtracking before even getting pushback. (I’d hate to see him in court, “Members of the jury, he’s innocent! Unless, well, you don’t think so. OK, we’ll plea bargain with opposing counsel…”)

Folks are tempted to backtrack when the buyer says, “But I can get it from XYZ provider at a lower price.” At this point, many service providers give the indication that they’re willing to negotiate prices.

Instead, acknowledge that other sellers’ prices are, indeed, all over the map and leave it there – you’re basically saying, “I acknowledge other providers’ prices are lower than mine, but my fee is my fee.”

Sometimes buyers might walk – that’s a risk you take. Many times, however, you’ll simply set the foundation for continuing the business development process at your preferred fee level.

2  Don’t start talking cost structure: Imagine, for example, your firm is looking to win a $7k retainer. Some clients will ask, “Well, how did you come up with that price?”

The service provider then pulls out a scope sheet of how this person’s rate is X, this person’s rate is Y, and this cost that we have to pay every month is Z, so here’s the fee. Heading down this path is a slippery slope and leads to nickel and diming here, there, and everywhere.

In Fees and Pricing Benchmark Report: Consulting Industry 2008, RainToday.com and the Wellesley Hills Group found that firms of various price and profit levels use retainer pricing. However, those firms that achieve premium prices and profit levels do not share the underlying fee structure nearly as often as the other firms.

Think of it like this: If you went to buy a car and asked what the exhaust system cost or how much the dashboard set them back, you would probably get laughed at. In the same vein, you should not lift up the hood simply because you’re asked what your costs are.

3  Ask, “Which part don’t you want?”: Service providers are tempted to cut fees when they get pushback, especially for large deals. The logic goes like this, “Well, it’s a $120k deal, but if we get it, we can get by with $110k and be OK. That would be better than losing the whole thing.” So they cut their fees.

This is a bad precedent to set if repeat business is important at your firm. You’ll always play the price-cut game at contract renewal time.

Instead, when a client is considering a $120k deal comprised of 5 major components, ask them which component they don’t want? You might find yourself going component by component and, as the client realizes they want the whole thing, you don’t cut your fee.

Also, going component by component forces the client to consider what it would take them to do that particular component of the work (if they could even do it). All of a sudden they realize how much they’d prefer to pay you to get it done.

4  Don’t dismiss the buyer when they push back: I often hear this comment, “If they push back on price, we don’t want them! Pushing back on price is an indicator that a client will be high maintenance or worse down the road.”

Perhaps this is not the case. Buyers are often taught to challenge prices in multiple ways. Just because they challenge you doesn’t mean they are bad people or are destined to be bad clients. It also doesn’t mean they’re challenging your value personally. (I’ve seen many service providers react viscerally and personally to fee pressure. Bad form.)

It often means they’re trying to figure out how to engage you and your services. Some providers discount, others don’t. They’re just asking. Hold your ground and treat them reasonably in the process, and oftentimes they’ll just come around.

Clients will, in the end, pay more for your services if they see you offer more value than the alternatives. And as much as you might disdain the thoughts, buyers will continue to pressure price, and service providers will continue to discount to win business. Follow these guidelines when you get price pressure, and you’ll find yourself winning more deals at your asking price.

Mike Schultz is Principal and Founder of the Wellesley Hills Group, a management consulting and training firm focused on helping companies in the services sector to increase their revenue and profit. WHG specializes in both marketing and selling of services and offers a full suite of capabilities including sales training for consultants and professionals, marketing strategy development, and marketing implementation.  Visit his website

February 19, 2010

Guest Article: “The Seduction of Low-Hanging Fruit,” by Jill Konrath

The Seduction of Low-Hanging Fruit
by Jill Konrath

I remember the first time it happened. It was on a Thursday, about 4 pm, and I was worn-out after a day of cold calling. I hadn’t uncovered even one viable prospect. Enough was enough! Time to go back to the office and do some paperwork.

When the phone rang, I answered it tiredly. But by the time I hung up I was a new person. I had just talked to one hot prospect!

Her company was BUYING! Not just looking – BUYING! They needed several new systems to handle their growth. And they wanted to make a decision quickly.

“Can we come in for a demonstration,” she asked.

How could I refuse! They came in the following Monday and we spent about two hours together. We discussed their needs and I showed them several possible options. Things seemed to go really well. In parting, they asked me to call back early the next week.

Tuesday morning I left a message. Wednesday and Friday too. My calls were never returned. It wasn’t till a week later that I finally got my prospect on the phone. She thanked me for my hard work, fast service and excellent demonstration. Then, very apologetically, she told me they’d selected another vendor.

I asked “Why,” but her answer was evasive and focused on minor details. Of course, price was thrown in too – as it always is when you lose.

I’m embarrassed to tell you that this happened to me more than once. And sometimes I invested an inordinate amount of time and effort in those so-called “hot prospects.” I coordinated elaborate meetings and prepared detailed proposals. I even rearranged meetings with prospective customers who weren’t quite ready to move ahead.

Can you guess what happened? That’s right. I almost always lost the business.

Lest you think I’m not too smart, it didn’t take me too long to figure out something was wrong. My proposals, presentations and demos were fundamentally sound, so it had to be something else. But what … When I talked to the more seasoned sellers, I was cautioned on wasting my time with ‘low-hanging fruit” – in other words, companies who are ripe to buy.

They told me that many of these prospects already have made their decision, but are checking the market for two reasons: 1) To prove to higher-ups they did a thorough investigation, or 2) To leverage competitive offers to reduce their preferred vendor’s pricing.

Yikes! That explained a lot of things. Naively, I had assumed that I had a fair shot at every deal.

Learning how to ferret out those opportunities where it was worthwhile to pursue low-hanging fruit was hard. I had to be much more straightforward than I was used to being and ask questions that made me uncomfortable. But by doing this, I saved myself lots of hard work. And, I had more time to spend on prospects where I could win.

* * ******************************************************************

It’s not only individuals who are seduced by low-hanging fruit. Sometimes whole companies are sucked into these ‘get-rich-quick’ schemes.

Several years ago one of my clients introduced a new product targeted at a highly profitable niche owned by their competitor. They were late to this market and, in essence, their product was a higher-priced copycat with enhanced capabilities.

In the months preceding the launch, sales reps continually fed marketing stories about all the money being left on the table because the new product wasn’t ready. They told marketing about all the prospects who called wanting to know when their new system would be available. Everyone was drooling. So many buyers, so little time.

Their entire launch plan focused on the low-hanging fruit. Sales reps, armed with proposal templates and PowerPoint presentations highlighting competitive strengths, were chartered to go after companies on their “Hot Prospects List.”

Hard as I tried, I couldn’t convince them of the folly of this decision. The seduction was complete.

So what happened? In the six months immediately after the launch, very few systems were sold. Their only orders came from existing customers where reps had strong, long-term relationships with key decision makers. Within two years the company quietly exited this market niche because it was too costly to penetrate.

The lure of low-hanging fruit never completely goes away. The chance to make easy money is just too seductive.

I still have to caution myself when I encounter these opportunities. The worst thing about them is the wasted time that could have spent with prospects where my chances of winning were much higher.

Lessons Learned

1. In most cases, you can’t get into a sales process late and expect to win. If your competitor already has a strong relationship with the customer, they’re in the driver’s seat. They’ve likely already established decision criteria that only their company can meet.

2. Be willing to ask tough questions. If your new prospect is ready to buy, make sure you ask them:

– Who else are you looking at?

– Has your company done business with these companies before?

– Why would you consider switching?

If your prospects express strong dissatisfaction with a competitor, you might have a real opportunity. But if they’re just looking around, be wary of investing too much of your time and company’s resources trying to get the business.

3. Your best prospects will be those companies where you already have an established relationship OR where you get in early, before customers are making a decision. In the latter case, by uncovering and developing account needs, you’ll build the strong relationship you need to win the order when they’re ready to make a change.

Jill Konrath, author of Selling to Big  Companies, is a recognized sales strategist in the highly competitive business-to-business  market. A popular speaker at sales meetings, she helps her clients crack into  corporate accounts, speed up their sales cycle and generate demand for their offering.  Visit her website http://www.sellingtobigcompanies.com

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